Court date set for CAT drug dispute

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Cambridge Antibody Technology's dispute with its US partner over royalties for a potential $1bn-a-year arthritis drug will be heard in November, the biotechnology company said yesterday.

Cambridge Antibody Technology's dispute with its US partner over royalties for a potential $1bn-a-year arthritis drug will be heard in November, the biotechnology company said yesterday.

The dispute with Abbott Laboratories, which will be heard in the High Court from 22 November, is key to CAT's fortunes, with some analysts saying its shares could be worth more than 900p or less than 400p, depending on the outcome of the case. CAT shares closed down 27p at 507p yesterday.

Analysts welcomed the news, noting that Abbott had agreed to the trial date and so was unlikely to delay proceedings, as some had previously feared. But there was no certainty that CAT would win and in either case the losing side was likely to appeal, dragging out the process, they added.

Abbott sells the rheumatoid arthritis drug Humira, CAT's first product to reach the market, and believes it can deduct royalties for third parties from the amount it pays to the British company. CAT disputes this.

"We believe that we are due the full royalty and we are seeking an outcome consistent with that," the chief executive, Peter Chambre, said.

CAT, which last November said it expected a trial to start in 12-18 months, said the hearing was expected to last about three weeks, with a judgment shortly after.

The company, which develops drugs from antibodies, reported a post-tax loss of £18m in the six months to 31 March, down from an £18.8m loss the year before. The company spent a net £14.2m, leaving £107.6m in the bank, and said it expected to spend less than £35m over its full financial year, compared with its previous forecast of up to £40m.

Mr Chambre said the lower cash outlay was partly due to stronger-than-expected sales of Humira, which Abbott has said is likely to make more than $700m this year and $1.2bn in 2005, which would make it the British biotechnology sector's first $1bn-a-year "blockbuster" drug. But the lower spending was also due to delays in a clinical trial programme with Genzyme.

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